FlashcardsChapter13
Term
Description
Unemployment
condition occurring when a worker who is not currently employed is searching for a job without success. (360)
Unemployment rate
the percentage of the labor force that is unemployed. (361)
Creative destruction
the introduction of new products and technologies that leads to the end of other industries and jobs. (362)
Structural unemployment
unemployment caused by changes in the industrial makeup (structure) of the economy. (362)
Frictional unemployment
unemployment caused by time lags in matching available jobs and workers. (363)
Unemployment insurance
a government program that reduces the hardship of joblessness by guaranteeing that unemployed workers receive a percentage of their former income while unemployed; also known as federal jobless benefits. (365)
Cyclical unemployment
unemployment caused by economic downturns. (366)
Natural rate of unemployment
the typical unemployment rate that occurs when the economy is growing normally. (366)
Labor force
those who are already employed or actively seeking work and are part of the work‐eligible population (civilian, non‐institutionalized, and age 16+). (368)
Deflation
condition occurring when overall prices fall. (370)
Consumer price index (CPI)
a measure of the price level based on the consumption patterns of a typical consumer. (371)
Purchasing power
the value of your income expressed in terms of how much you can afford; refers to how much your money can buy. (375)
Shoe‐leather costs
the resources that are wasted when people change their behavior to avoid holding money. (376)
Money illusion
the interpretation of nominal changes in wages or prices as real changes. (376)
